Relevance of DMF

The legal emergence of District Mineral Foundation from the 2015 MMDR amendment Act and its implementation framework rolled out in September 2015 or scheme called PMKKKY (Pradhan Mantri Khanij Kshetra Kalyan Yojna) threw light on two things; one that it is an extension of schemes for which some financing mechanism has been found and secondly that welfare of the affected by their identification & earmarking affected areas is expected. PMKKKY guidelines begin by outlining criteria for ‘Identification of affected areas and people to be covered under PMKKKY.’ DMFs were to be set up in each such district which is affected by mining and each state needed to frame rules but in compliance to the scheme.

The financial mechanism is the percentage equivalent of royalty that a miner has to deposit into DMFs account. Till November 2018, 557 DMFs have been constituted across 21 states. In a way it suggests that almost 557 districts and parts of it are affected by mining, a sector which contributes almost 1-2% of the GDP. An estimated ₹ 23606.11 Crore or ₹ 236 billion is also collected by these DMFs so far (January 2015-November 2018). The financing mechanism rests on the ‘more mining-more revenue’ principle which brings one more core principle of compliance and environmental management which cannot be separated from quality of life and infrastructure and thus must be performed upfront.

But if we look at the guidelines or the implementation framework provided under PMKKKY (September 2015), directly and indirectly affected areas and affected people were to be mapped and thus role of gram sabha became important. Many states also suggested including affected people’s representatives in the executive committee meant for looking at the day to day affairs of DMF. There is not even a single talk on these issues. Most of the schemes allocated by states reflect capital expenditure on creation of infrastructure where communities have little to add or say as it becomes a common pool. And what after mining ceases due to exhaustion of minerals – from where the schemes will be financed!

Where is the list of these affected areas? Where is the list of those who are affected by mining? What is seen on the web portals of few of these DMFs is amount collected and allocations made for schemes. There is no information which suggest the extent and scale of impact on people affected by mining. Chhattisgarh online portal has just mentioned ‘affected area’, mine-wise contribution’ and ‘mine list’ at the bottom of its online portal but these links do not work. In one of the presentations from Jharkhand (Ministry of Mines January Conclave), it is said that Rs. 233 Crore piped water scheme will benefit 1.5 lakh people in Tandwa block of District Chatra. This will mean whole CD block is affected. But there is nothing to verify, at least a list which pre-dates to the scheme and generated in consultation with the Panchayat – it may interest people to debate and make the scheme more meaningful and prevent wasteful expenditure.

The categories made under high priority sectors under PMKKKY clearly suggest that there is absence of basic amenities and there has been a disinterest in providing amenities in such areas due to variety of administrative and operational reasons. But the question than arises, if infrastructure is created will there be a provisioning of O&M funds over the life of the asset. Who will own it, the local Panchayat or the Department? If local Panchayat will own, what would be the financing mechanism in ‘no mining’ scenario. The functions of departments have to culminate to resolve issues surrounding common problems created by over exploitation of minerals – legally as well as illegally. In 2017-18 alone, 1.16 lakh illegal mining cases were detected in various states (Maharashtra 26,628, Uttar Pradesh 20212 & Madhya Pradesh 15,205 together >50% of such cases)₹ 2936 Crore or ₹29 billion – almost 13% of the DMF amount collected so far? The number of cases goes on to show the widespread illegality spread across states.

The most vulnerable in such regions will not be benefited by these schemes and will require more than a common pool – assistance which may be financial or directly targeted delivery of essential life sustaining facilities and services. If DMF fails to reach such people or population it has failed in its purpose and thus remains merely a financial mechanism for meeting the viability gap for the schemes which cannot be wholly financed by the government.

The news about prospective CAG audit of DMF funds utilisation and expenditure is a welcome step but on several previous instances CAGs interpretations have not been honoured with qualitative solutions by the respective state governments to resolve the issue. CAGs audit should include those who were expected to be benefited and whether such a scheme has uplifted the vulnerable to a social safety net.

Author – Nishant Alag

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Environics Trust is a not for profit research and community development organisation and an enabling institution. Environics conducts participatory research on issues of environmental and human behavior and uses these outcomes for innovative community development programmes. Environics provides research and evaluatory services to International, National, State and Local Institutions and directly works with marginalised communities such as those in the mountain regions, tribals and communities adversely affected by mining and industrialisation